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Opinion No. 5199

June 13, 1977


Subject to the property tax roll-back provisions of 1975 PA 243.


Roll-back provisions of 1975 PA 243.

Section 34 of the General Property Tax Act, as amended by 1975 PA 243, applies to local millages of counties, cities, townships and villages, but does not apply to millages levied by a multi-county authority such as the Huron-Clinton Metropolitan Authority.

Mr. David O. Laidlaw


The Huron-Clinton Metropolitan Authority

3050 Penobscot Building

Detroit, Michigan 48226

You have asked:

'Does Section 34 of the General Property Tax Act (MCLA Sec. 211.34) ('Section 34'), which requires the reduction of a local taxing district's millage levy if the Michigan State Tax Commission increases county equalized value in the process of state equalization, apply to millage levied by The Huron-Clinton Metropolitan Authority '

Section 34 of the General Property Tax Act, 1893 PA 206; MCLA 211.34; MSA 7.52, was amended by 1975 PA 243 to provide:

' [E]ach year the county board shall advise the local taxing units when the state tax commission increases the equalized value of the county as established by the board of county commissioners and each taxing unit other than a school district, intermediate school district, or community college district, shall immediately reduce their millage rate so that subsequent to the increase ordered by the state tax commission pursuant to Act No. 44 of the Public Acts of 1911, as amended, being sections 209.1 to 209.8 of the Michigan Compiled Laws, total property taxes levied shall not exceed that which would have been levied if there had been no increase in valuation by the state.

In effect, the act provides that when a county equalizes at a figure lower than state equalized value, local millages, except those levied for school purposes, shall be reduced to such an extent that the revenues generated thereby will equal the product of the county's equalized value times the original local millage rate. To illustrate, when a county equalizes at 40% of true cash value, and the state equalizes the county at 50%, local millages, except those for school purposes, must be reduced by 20%.

In reviewing the applicability of the 1975 PA 243 millage roll-back to the Huron-Clinton Metropolitan Authority, it must be determined whether the Authority is a 'local taxing unit' subject to the act. The Huron-Clinton Metropolitan Authority covers a five-county area; its millage levy (1/4 mill) extends into five counties. If the Authority is a taxing unit, as such, it certainly is not 'local' from the viewpoint of any particular county board of commissioners, as it encompasses five counties. The term 'local taxing unit' appears to have been selected by the legislature intentionally to exclude units larger than, or including an area not encompassed by, a particular county.

The conclusion that the Authority should not be deemed to be a 'local taxing unit' is supported further by Huron-Clinton Metropolitan Authority v Bds of Supervisors, 300 Mich 1; 1 NW2d 430 (1942), where the Supreme Court concluded that the millage levied by the Authority was not subject to the county allocation provisions of the General Property Tax Act. Likewise, in Huron-Clinton Metropolitan Authority v Oakland Co Supervisors, 316 Mich 632; 25 NW2d 646 (1947), the Supreme Court affirmed that the Authority was not a separate and independent taxing unit, as such. There the Court stated [p 635]:

"The act does not create a separate and independent tax unit to which its portion of our millage tax must be apportioned by the tax allocation boards of the respective counties."

In reaching the conclusion that the Authority is not a 'local taxing unit' within the meaning of 1975 PA 243, I am not unmindful that Huron-Clinton is a local governmental unit for other purposes. In Huron-Clinton Metropolitan Authority v Bds of Supervisors, supra, page 18, the Court held:

'this authority is clearly a State agency which functions in a limited way in a fixed local territory. The State has not 'surrendered or suspended by any grant or contract' to the Authority the power of taxation; but instead the legislature has delegated to it as a governmental agency the power to determine within a fixed limitation the tax that the local tax officers shall levy and collect for its use.'

See also: OAG, 1945-46, No 0-4298, p 620 (March 1, 1946).

More importantly, however, the conclusion that Section 34 does not require the roll-back of Authority millage comports with the uniformity clause of Const 1963, art 9, Sec. 3. Since In re Appeal of General Motors Corp, 376 Mich 373; 137 NW2d 161 (1965), it has been undisputed that uniformity of taxation is the cornerstone of Michigan ad valorem taxation. Equally clear is the principle that uniformity must be coextensive with the territory to which the tax applies. In Titus v State Tax Comm, 374 Mich 476, 480; 132 NW2d 647 (1965), the rule was stated as follows:

' [T]his Court adopted the following from Exchange Bank of Columbus v Hines, 3 Ohio St 1, 15:

"What is meant by the words 'taxing by a uniform rule?' And to what is the rule applied by the Constitution? No language in the Constitution, perhaps, is more important than this; and to accomplish the beneficial purposes intended, it is essential that they should be truly interpreted, and correctly applied. 'Taxing' is required to be 'by a uniform rule;' that is, by one and the same unvarying standard. Taxing by a uniform rule requires uniformity not only in the rate of taxation, but also uniformity in the mode of the assessment upon the taxable valuation. Uniformity in taxing implies equality in the burden of taxation; and this equality of burden cannot exist without uniformity in the mode of the assessment, as well as in the rate of taxation. But this is not all. The uniformity must be coextensive with the territory to which it applies. If a State tax, it must be uniform over all the State; if a county, town, or city tax, it must be uniform throughout the extent of the territory to which it is applicable."'

In the case of the Huron-Clinton Metropolitan Authority, the territory in which the tax applies is a five-county area; uniformity requires that the tax-payers throughout the tax-levying Authority pay the same millage upon the standard of state equalized value.

In the instant matter, four counties have equalized at 50% of true cash value, the level of state equalized value. For purposes of the Authority, they levy 1/4 mill upon 50% of taxable value. The fifth county, Macomb, was county equalized at approximately 43%, rather than 50%, of true cash value. In Macomb, then, local millages are subject to the roll-back. If Huron-Clinton millages were also rolled back, it is clear that taxpayers in four counties in the Authority would be paying twenty-five cents per each $1,000 of state equalized value, while Macomb County taxpayers would be paying only twenty-one cents per each $1,000 of state equalized value. It is clear that the tax levy for Huron-Clinton would not be uniform.

Accordingly, in construing the roll-back provision of Sec. 34, the rule reiterated in State Bar of Michigan v Lansing, 361 Mich 185, 195; 105 NW2d 131 (1960), is applicable:

'The general principle has repeatedly been invoked that if a legislative enactment is of such a character that it is subject to differing interpretations, one of which would result in the act being held unconstitutional and the other permitting its being upheld as valid, the latter alternative will be accepted. In other words, the presumption is that the legislature would not intend to pass an act in contravention of a constitutional restriction or otherwise invalid.'

Therefore, it is my opinion that Section 34 of the General Property Tax Act, as amended by 1975 PA 243, applies to local millages of the county, city, townships and villages, but does not apply to millages levied by a multicounty authority such as the Huron-Clinton Metropolitan Authority.

Frank J. Kelley

Attorney General